=== modified file 'bzrlib/branch.py'
--- bzrlib/branch.py	2009-02-02 05:47:08 +0000
+++ bzrlib/branch.py	2009-02-16 14:56:27 +0000
@@ -1565,12 +1565,17 @@
     def get_reference(self, a_bzrdir):
         """See BranchFormat.get_reference()."""
         transport = a_bzrdir.get_branch_transport(None)
-        return transport.get('location').read()
+        return urlutils.join(a_bzrdir.root_transport.base,
+            transport.get('location').read())
 
-    def set_reference(self, a_bzrdir, to_branch):
+    def set_reference(self, a_bzrdir, to_branch, use_relpath=False):
         """See BranchFormat.set_reference()."""
         transport = a_bzrdir.get_branch_transport(None)
-        location = transport.put_bytes('location', to_branch.base)
+        ref_url = to_branch.base
+        if use_relpath:
+            ref_url = urlutils.relative_url(
+                a_bzrdir.root_transport.base, ref_url)
+        location = transport.put_bytes('location', ref_url)
 
     def initialize(self, a_bzrdir, target_branch=None):
         """Create a branch of this format in a_bzrdir."""

=== modified file 'bzrlib/tests/test_branch.py'
--- bzrlib/tests/test_branch.py	2008-10-07 11:54:11 +0000
+++ bzrlib/tests/test_branch.py	2009-02-16 14:58:12 +0000
@@ -396,7 +396,7 @@
         self.assertEqual(opened_branch.base, target_branch.base)
 
     def test_get_reference(self):
-        """For a BranchReference, get_reference should reutrn the location."""
+        """For a BranchReference, get_reference should return the location."""
         branch = self.make_branch('target')
         checkout = branch.create_checkout('checkout', lightweight=True)
         reference_url = branch.bzrdir.root_transport.abspath('') + '/'
@@ -406,6 +406,20 @@
         self.assertEqual(reference_url,
             _mod_branch.BranchReferenceFormat().get_reference(checkout.bzrdir))
 
+    def test_get_reference_relpath(self):
+        """For a BranchReference, get_reference should return the location."""
+        branch = self.make_branch('target')
+        checkout = branch.create_checkout('checkout', lightweight=True)
+        # set relative reference
+        _mod_branch.BranchReferenceFormat().set_reference(checkout.bzrdir,
+            branch, use_relpath=True)
+        reference_url = branch.bzrdir.root_transport.abspath('') + '/'
+        # if the api for create_checkout changes to return different checkout types
+        # then this file read will fail.
+        self.assertFileEqual('../target/', 'checkout/.bzr/branch/location')
+        self.assertEqual(reference_url,
+            _mod_branch.BranchReferenceFormat().get_reference(checkout.bzrdir))
+
 
 class TestHooks(TestCase):